2015 (10) TMI 1158 - AT - Central Excise

Duty demand - Activity of purchasing raw material inputs and computer parts from the open market and assembling in their premises and selling as computer system - Held that - Revenue initiated proceedings against the several persons in assembling of parts and selling the computer system. The Tribunal in the case of CCE Ahmedabad vs. Macro Tech. Pvt. Limited & 4 others dismissed the appeal filed by the Revenue. - following the Tribunal s earlier order in the case of Macro Tech P. Limited (2008 (8) TMI 75 - CESTAT AHMEDABAD) we set-aside the impugned order - Decided in favour of assessee.

Summary

Issues: Classification of computer system under Central Excise Tariff Act, 1985 without obtaining registration; Applicability of Central Excise law on assembling computer parts.

In this case, the appellant was purchasing raw material, inputs, and computer parts from the open market, assembling them in their premises, and selling the resulting product as a computer system. The issue revolved around the classification of the computer system under heading 8471000 of the Central Excise Tariff Act, 1985, and whether the appellant cleared the product without obtaining Central Excise registration. The adjudicating authority confirmed a demand of duty along with interest and penalty, which was later set aside by the Commissioner (Appeals).

The Tribunal referred to a previous case involving the Revenue and several persons assembling computer parts to determine whether such activities amounted to the manufacture of a computer system. The Tribunal cited the decision in the case of CCE, Mumbai vs. CMS Computers (P) Limited, where it was held that monitors and printers are not essential parts of a computer and are considered peripheral items. The Tribunal also mentioned previous decisions in cases involving Wipro Information Technology Limited and Wipro Limited, where it was established that activities like supplying monitors and printers bought from the market, duty paid, and supplied along with computers do not constitute manufacturing computer systems. Additionally, the Tribunal cited a Supreme Court decision in the case of PSI Data Systems, emphasizing that such activities do not amount to the manufacture of computer systems.

Based on the precedents and established legal principles, the Tribunal concluded that the issue at hand had already been settled in previous decisions. Therefore, the impugned order was set aside, and the appeal filed by the appellant was allowed. The Tribunal's decision was in line with previous rulings and established interpretations of the Central Excise law regarding the assembly and sale of computer systems.